Starting a business is not easy work but can be extremely rewarding. It is hard work because so many decisions are to be made at the beginning, from choosing a location, coming up with branding, making the necessary financial choices and of course the legal steps to be taken.

Kuwait was one of the toughest places in the region for a small and medium enterprise (SMEs) to start because of the complicated laws that were in place for obtaining a commercial license. Yet we have seen Kuwaiti SMEs excel in in the past 10 years, locally and internationally, in different sectors, like Talabat in the tech sector, Pick for delicious healthier food options in the food and beverage sector, Khaleejesque in media and many more that we as young Kuwaitis are very proud of. But how did they do it?

I am sure there is no right or wrong answer to this question, and although I have been fortunate enough to take courses from Ivy League universities on how to start an entrepreneurship, I am no expert, so I will refrain from giving any business advice. But as a lawyer and business owner myself, I can tell you that it is very important to take all the right legal steps at the beginning. In today's article, I am going to answer questions about the new business platforms available and Legal Contracts 101.

Question: I have heard there are new business laws in Kuwait which can allow you to obtain a commercial license in one day. Is this true?

Fajer: Kuwait has fairly new business laws. The Kuwait companies law was promulgated a few years back and we as lawyers are still finding out the consequences of the new laws. I think you are referring to the new Kuwait Business Center in Kuwait (www.kbc.gov.kw). It is a new initiative by the Ministry of Commerce and Industry aimed at making obtaining a commercial license easier. It will definitely take more than one day, but now you can finalize all the paperwork with one visit to one center instead of multiple visits to different government entities. Their website is user friendly with information a new business owner might need. They have even published all the laws and regulations that might be of interest in Arabic and English. Check them out.

Copy and paste

I am just starting and I cannot afford legal services. Can I draft my own contracts by copy pasting from free contracts available online?

Fajer: No. I highly do not advise on the above. I see my clients do it all the time though and then regret it. Contacts might seem simple but they aren't, and one sentence or one word can make a huge difference. Also, what is available online for free is usually not for Kuwaiti law, so I advise you contact a lawyer. I understand that legal advice might be expensive at times, but I am sure a lot of lawyers, like myself, provide advice at discounted rates for SMEs or provide packages for those just starting.

Even though it's important to contact a lawyer, I also advise those starting in a business to understand a few contract basics before starting out. Here are a few explanations that I like to call Contracts 101 and discuss with my clients that are about to start a business:



1. Parties: Always double check that the person representing the party/ parties you are about to sign with has the right to legally sign.

2. Preamble: A preamble is a short summary usually found at the beginning of the contract. Its purpose is to explain why the contract is being drafted and signed. Make sure that the preamble is clear on the intentions of all parties involved.

3. Boilerplates: Boilerplates are standardized clauses found in most contracts and are often agreed to without negotiation. Here are the main ones that I think each business owner should understand:

- Cost and attorney fees: Who will pay any additional legal fees should there be any?



- Arbitration: It is a form of resolution for disputes outside of the local courts. In other words, if the parties involved get in an argument regarding the agreement, a third party of their choice can resolve the issue without going to court.



- Choice of law and jurisdiction: This is important to Kuwaiti companies that are signing contracts with parties outside of Kuwait. When a dispute occurs with regards to the contract, where would you want the dispute resolved? Or according to what law?



- Method of payment: Although it is always good to be very clear, you don't want to write unnecessary information. With that said, payment obligations by one party to another need to be specific, as in how are the payments going to be made and when? Bank transfer? Cheque? When the shipment is delivered? Two days after receipt of an email? And so on.



- Signature: Usually there is a place for the parties to sign right at the end of the contract, but I suggest that you get all parties involved to sign every page of the contract.

As I said, I am very proud of all the SMEs in Kuwait and what they have given back to this country and its economy, and therefore would love to assist any young entrepreneurs.

By Attorney Fajer Ahmed

For any legal questions or queries, email [email protected].